Tax Depreciation for Business Owners – Maximising Deductions & Cash Flow

1. Can Business Owners Claim Tax Depreciation on Their Property?

Short Answer:

Yes! If you own or lease a commercial property, you can claim depreciation on the building structure (Division 43) and business assets (Division 40).

What Business Owners Can Claim:

✔ Capital Works (Division 43) – 2.5% per year for structural improvements.
✔ Plant & Equipment (Division 40) – Includes IT equipment, machinery, and office furniture.
✔ Leasehold Improvements – Depreciation for fit-outs, renovations, and business upgrades.

📌 Get a Business Property Depreciation Report: Request a Quote

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2. How Does Depreciation Work for Leasehold Improvements?

Short Answer:

If a business leases a commercial space and pays for a fit-out, those costs can be depreciated over time.

Key Leasehold Improvement Depreciation Rules:

✅ Business Owners Claim Fit-Out Costs – Partitions, flooring, lighting, air conditioning.
✅ Division 40 Applies to Equipment – Includes IT infrastructure, desks, and commercial kitchen gear.
✅ Balancing Adjustments Apply When the Lease Ends – Unclaimed depreciation may be written off.

📌 Maximise Your Leasehold Improvement Deductions: Request a Depreciation Report

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3. What Business Assets Qualify for Tax Depreciation?

Short Answer:

Most business-related assets can be depreciated under Division 40 based on their effective life.

Common Depreciable Business Assets:

✅ Office Equipment & IT – Computers, printers, and telecommunication systems.
✅ Machinery & Tools – Workshop and industrial equipment.
✅ Furniture & Fixtures – Desks, shelving, and reception areas.

📌 Check Your Business Asset Depreciation Eligibility: Speak to Koste

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4. How Does Instant Asset Write-Off Affect Business Depreciation?

Short Answer:

The Instant Asset Write-Off allows eligible businesses to immediately deduct certain asset purchases, rather than depreciating them over time.

How the Instant Asset Write-Off Works:

✔ Applies to eligible business assets purchased within ATO limits.
✔ Thresholds change annually based on government policy.
✔ If the asset isn’t eligible for full write-off, it can still be depreciated.

📌 Check If Your Business Qualifies for the Instant Asset Write-Off: Speak to an Expert

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5. How Can Businesses Use Depreciation to Improve Cash Flow?

Short Answer:

Depreciation reduces taxable income, lowers tax bills, and frees up cash for business growth.

Cash Flow Benefits of Tax Depreciation:

✅ Immediate tax savings – Reduces business taxable income.
✅ Strategic asset purchases – Maximises deductions while reinvesting in the business.
✅ Better financial planning – Forecast asset replacements and depreciation benefits.

📌 Plan Your Business Depreciation Strategy: Request a Consultation

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6. Can Depreciation Be Claimed on a Business Sale?

Short Answer:

Yes, but CGT and balancing adjustments must be considered when selling a business that includes depreciable assets.

Depreciation & Business Sales:

✔ Selling at a profit? – The difference between asset sale price and written-down value may be taxable.
✔ Selling below book value? – A deduction may apply for remaining depreciation.
✔ Asset separation matters – Proper allocation between goodwill and depreciable assets affects tax outcomes.

📌 Get Expert Advice on Depreciation & Business Sales: Speak to Koste

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7. Do Business Owners Need a Site Inspection for a Depreciation Report?

Short Answer:

For most businesses, a site inspection is recommended for accurate depreciation claims, especially for high-value assets or fit-outs.

When a Site Inspection is Required:

✅ Custom-built office spaces or factories.
✅ Properties with significant leasehold improvements.
✅ Businesses with extensive equipment and machinery.

📌 Find Out If You Need a Site Inspection: Get a Free Assessment

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8. How Long Does It Take to Get a Business Tax Depreciation Report?

Short Answer:

Most reports are delivered within 7-10 business days, depending on property size and complexity.

Process Timeline:

1️⃣ Order Online – Provide basic business property details.
2️⃣ Data Collection & Cost Analysis – We assess fit-out costs, equipment, and property improvements.
3️⃣ Report Preparation – Completed by Chartered Quantity Surveyors (AIQS & RICS).
4️⃣ Report Delivery – Sent to your email within 7-10 business days.

📌 Order Your Business Depreciation Report Now: Start Here